February 25, 1919 



HARDWOOD RECORD 



21 



The Building Situation 



What is holding back building and construction work? 

 More than 500 opinions on this question have been received in the 

 last two weeks by the Department of Labor at Washington. Many 

 building authorities blame congress, others charge the financial inter- 

 ests of the country with responsibility. • In the Central West, freight 

 rates are said to be exerting an injurious influence. In the mam, 

 high costs of materials are held to be the chief obstacle. 



' ' Don 't expect private capital to build merely for the sake of fur- 

 nishing jobs for workmen," writes a well-known architect from Buf- 

 falo. ' ' That is the obligation of the government, be it local, state or 

 national. Let public works be started at once for the benefit of the 

 public. The cost will be high and the public will have to pay the price, 

 but the public will reap the benefit in the reduction of unemployment, 

 the absorption of the products of many industries and the use of many 

 works of which there is great need. ' ' 



From Passaic, N. J., comes the following statement: "I am greatly 

 hindered in progress of this work by not being able to procure loans 

 by way of mortgage, in large amounts, say, in the neighborhood of 

 $150,000. The banking institutions and mortgage companies are 

 making only small loans around here and, even where there is ample 

 security, will not consider investing a large amount of money in one 

 place. ' ' 



Labor conditions and demands are held to be unfavorable to imme- 

 diate building operations by many. An architect, writing from Lin- 

 coln, Neb., makes the following statement, typical of the complaints 

 along this line: 



Construction work In these parts is now and has been impeded not a 

 little, due to the unreasonable demands of labor not only for exorbitant 

 wages, but more by ttie fact certain very undesirable trade rules are being 

 enforced by labor organizations, which run up enormously the cost of doing 

 work. 



Many of the contractors and builders in the Central West assert 

 freight rates are the chief trouble. Typical of these arguments is 

 the following from Greenville, Ohio: 



We have no complaint to make in the matter of securing credits, building 

 materials and labor. It Is true that wages are quite high and yet not 

 prohibitive. The greatest detriment to our industry through the Central 

 West is prohibitive freight rates on sand and gravel. It is not only threat- 

 ening to destroy our industry, but at the same time it is impeding highway 

 construction and other building projects which demand a high grade of 

 these basic materials. 



Lack of cooperation on the part of financial interests seems to be 

 the outstanding obstacle in New York. One of the best authorities on 

 the building industry in New York City sums up the situation there 

 in this fashion: 



We have in the United States serious difficulty owing, principally, to the 

 unwillingness of financial interests to cooperate in building projects with 

 the material and labor market in its present condition. We are working 

 on a total of nine industrial projects involving approximately 6000 work- 

 men's homes, to be carried out by private interests in various important 

 industrial centers, but in each case we are hampered by the building loan 

 situation. The only definite work we expect to carry out without delay 

 is located outside of the United States. 



From St. Louis, Mo., a well-known architect writes: "I am firmly 

 convinced that the one thing the building public wants to know is the 

 cost of building today as compared to the next three to five years. 

 If they could be assured that the cost will not drop within that time, 

 there would be a tendency to proceed with the needed work. ' ' 



What can be expected in material prices for the next five years? 

 While the investigation lacks completeness at this time, no definite 

 conclusions may be stated. Many eminent building and material au- 

 thorities, however, insist that no nvarked decrease in material prices 

 may be expected for the next five years. They assert with some posi- 

 tiveness that pre-war prices on building materials will not be re-estab- 

 lished for several years, if ever. These assert that persons who delay 

 building in the hope of marked reductions in building costs probably 

 ■will be disappointed and will have denied themselves the use of needed 

 property and the revenues which would be derived therefrom. 



In response to the Department of Labor's inquiry as to future rates 

 on building and construction materials, the U. S. Railroad Administra- 

 tion asserts there is to be no general thirty per cent advance on freight 

 rates for sand, gravel, crushed stone and slag. The rumor that such 

 advances were contemplated was arousing anxiety in the Central West. 

 Under date of January 20 the railroad administration put out a cir- 

 cular which says: "There is no foundation for the report that the 

 Railroad Administration has given or is giving any consideration to 

 any increase in present basis of rates. ' ' 



The Department of Labor points out that building, being a basic 

 industry, will stimulate general business and is, therefore, very vital 

 to continued financial prosperity. The national economic loss result- 

 ing from the idleness of thousands of men cannot be permitted and its 

 injurious effects escaped. Present building costs are not so high that 

 they equal in the aggregate the wealth the country loses through the 

 idleness following in the wake of building stagnation. 



Open Price Operators Enthusiastic 



Optimism for the future of the hardwood industry was the keynote 

 expressed at the meeting of the "Open Competition Conference" of 

 the eastern division of the American Hardwood Manufacturers' As- 

 sociation at the Hotel Sinton, Cincinnati, Ohio, February 11. The 

 meeting was a regular one, but was unusually well attended, and 

 conditions locally and in the hardwood business generally were thor- 

 oughly discussed. The association has members in the states of Ohio, 

 Virginia, West Virginia, Kentucky and Tennessee. Frank R. Gadd, 

 manager of statistics of the American Hardwood Manufacturers' 

 Association, was in attendance. The outlook in business was brought 

 out by a series of questions bearing on the trade locally and abroad. 



The general tone of the discussion brought out the fact that condi- 

 tions have improved materially in the last fifteen days, and indica- 

 tions point to an improvement in the future. Buyers, it was said, are 

 beginning to learn that prices generally cannot go down much lower, 

 and everybody expects a material improvement in the next sixty days. 



Production for this time has been fifty-three per cent under normal, 

 as compared with forty-three per cent under normal during the pre- 

 ceding fifteen days. The demand also was under normal. There is no 

 trouble about car supply, manufacturers at the meeting all uniting 

 in the report that transportation facilities are ample for the trade. 

 Collections were reported as rather slow, though some individual manu- 

 facturers reported that they were about normal in their own cases. 

 The manufacturers said that while they do not believe prices will go 

 up any they do not think they will go much lower. 



A summary of market conditions for the last fifteen days showed 

 an improvement with a firm undertone. It was thought that it would 

 take about two weeks to fill all the orders on hand. Stocks showed 

 a decrease of fifteen per cent over normal. Labor conditions were 

 reported as materially improved, the return of war workers, munition 

 makers and soldiers and sailors insuring an ample supply of labor. 



The advertising campaign, which is now being voted on by members 

 of the association for the promotion of oak lumber, was touched upon. 

 Considerable enthusiasm was shown over this movement and there is 

 no doubt that it will be well supported. Cincinnati hardwood men are 

 in favor of the plan quite generally. 



Talks with individual manufacturers at the meeting brought out 

 some interesting views on the future of the hardwood industry. One 

 said: "This will be a year of salesmanship. Salesmen will have to 

 be more than order takers — they will have to be able to talk straight 

 business and, most of all, instill confidence. When once confidence 

 is thoroughly instilled in buyers over the outlook, orders will come in 

 fast enough; in fact, our mills will be tested to their capacity, but it 

 will take some strong missionary work on the part of the salesmen 

 to instill confidence." 



